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Verizon Wireless settles ETF class action suits

Verizon Wireless agreed Monday to pay $21 million to settle a series of class action lawsuits concerning early termination fees (ETFs) of up to $250 that are typically imposed on mobile phone subscribers who cancel service during their contract term. The “agreement in principle,” to be filed with the Alameda County Superior Court in California, comes as the FCC continues to consider rules that would establish a uniform regulatory framework for ETFs and that would mandate pro-rata or other limits on ETFs assessed by the nation’s wireless carriers. (Prior to the launch of FCC rulemaking proceedings, Verizon announced it would pro-rate ETFs according to the time remaining on a departing customer’s contract.) According to a Verizon spokeswoman, the settlement covers class action litigation filed in Alameda County as well as a separate nationwide class action complaint on ETFs. Last week, arguments in the case commenced before an Alameda County jury, and Verizon offered no comment on its decision to settle at this time. (Officials confirmed, however, that Verizon is admitting to no wrongdoing.) In a related suit involving ETFs, the same jury ruled last month in favor of Sprint Nextel, determining that class members did breach their wireless contracts and that costs incurred by Sprint from that breach exceeded the amount paid by the class members in ETFs.

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